Changes
to Withholding Tax Calculations for Employees in Adjunct Positions

Purpose

To explain the change in methodology
used to calculate withholding taxes for adjunct employees.

Background

The methodology for calculating
withholding taxes for all State employees, including employees in adjunct
positions, was changed when New York State converted to a new payroll system
in 1998. The withholding methodology that was used upon conversion complied
with Federal, State and Local regulations, but it generally resulted either
in lower tax withholding amounts or no taxes being withheld at all. The new
methodology will now calculate withholding taxes based on earnings in each
paycheck, without regard to the contract period or the total amount earned
over the contract period. It will also factor in the combined result of
multiple contract payments. The new methodology will result in an increase
in the amount of taxes withheld from the paychecks of employees in adjunct
positions under contract pay.

Affected
Employees

Employees appointed to adjunct
positions under contract pay.

Effective
Date

Payroll checks dated February 6, 2003

Tax
Withholding Methodology

The Percentage Method of Withholding for an
Annual Payroll Period per IRS Publication 15 (Circular E, Employer's Tax Guide)
will be used for federal tax calculations and the Annual Tax Rate Schedule per
NYS Publication NYS-50 for the State, NY City and City of Yonkers taxes. Tax
withholdings for employees in adjunct positions will now be calculated the same
way as tax withholdings for employees receiving biweekly salary payments. Returning
Adjunct employees will notice an increase in their withholding taxes as a result
of this change.

Agency Actions

Notify adjunct employees receiving contract
pay of the change to the tax withholding calculation methodology. These
employees should review their current withholding status and submit a new W-4
for federal and an IT-2104 for State, NY City and Yonkers taxes if changes are
requested.

Examples

Examples of the tax calculation methodology
are attached to provide further clarification.

Questions

Questions regarding this bulletin may be directed to the University Manager of Payroll Systems and Operations at CUNY Central Office.